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What you need to know about electric cars

What you need to know about electric cars

A lot of attention has been given to the looming rise of self-driving cars lately, to the extent that the method of their propulsion has been obscured as a result.

But if the future is driverless, then it is also electric.

A realistic option

Electric vehicles (EVs) have been a tantalising promise for decades now and can trace their origins back to the start of the 20th century, but it's only in recent years that they've moved beyond urban novelty to become a genuinely realistic option for regular mixed use.

This transition has been facilitated by the popularity of hybrid vehicles, led by the genuinely successful Toyota Prius and the Australian made Camry that shares its technology.

The growing number of hybrids on the road has helped motorists get used to the ideas of batteries holding fuel, rather than tanks.

And the sex appeal of high-end models like the Tesla Model S and BMW i3 has banished the geeky image that burdened earlier EVs, clearing the way for a new generation of affordable examples.

But an expensive option

The most obvious and most important reason is cost: the BMW i3 starts at $63,900, which is close to the $64,132 threshold of the local Luxury Car Tax (LCT) although this 33% levy kicks in at a higher rate ($75,526 in FY17) for ‘fuel efficient vehicles’.

But the $6000 mark-up for a hybrid variant and a $2000 fee for a bigger battery pushes what is a small hatch into rarefied territory.

Tesla’s Model S price range approximates the trajectory of Elon Musk’s Space X rocket, starting at just over $100,000 for the 60 and going into orbit at $206,692 for the P90D equipped with the ‘Ludicrous Mode’ super-acceleration system.

The Nissan Leaf is the cheapest EV option in Australia from $39,990 – reduced from its 2011 launch price of $51,500.

But at around twice the price of a comparable Toyota Corolla or Hyundai i30, it’s not hard to see why less than 2000 EVs were sold in Australia in 2015.

Costs and infrastructure challenges

This brings us to the question: why are EVs so expensive?

The simple answer is that they are built and sold in smaller numbers than fossil fuel-powered vehicles, using technology that is experiencing a rapid state of development.

The recent record low fuel prices have been a disincentive to investing in electric power and a lack of charging infrastructure is also a deterrent to new car buyers who are put off by 'range anxiety' – the fear that they will run out of power on the road.

Australia is an exception amongst First World nations in providing next to no assistance for buyers of EVs: there are no federal tax breaks – compared to the offsets on offer from state and federal bodies in the US worth $7000-$10,000 – and only the Australian Capital Territory (ACT) offers a stamp duty exemption.

Thrifty Car Rentals recently added a Tesla Model S to its ACT fleet, in part because it costs $7500 less to register the vehicle there than anywhere else in Australia.

And while the environmental benefits (and subsequent human health improvements) might seem obvious, the fact that the vast majority of Australian electricity still comes from coal somewhat tempers that argument.

Retail resistance

But using off-peak electricity or committing to alternative sources such as wind or solar delivers the desired benefits, which brings us to the final obstacle standing in the way of electric cars: the retail proposition.

An electric motor and drivetrain has far fewer moving parts than an internal combustion engine or gearbox, which means that servicing costs are likely to be far lower EVs than liquid-powered cars.

While this is good news for owners, it is a grim proposition for dealerships which can make more money from their servicing network than actual car sales.

Business Insider reports on the experience of one prospective Nissan Leaf owner who found himself being actively talked out of his purchase by sales staff who were pushing him towards their petrol-powered cars.

When he insisted on a test drive, he observed that the car had covered only 100km despite being in the showroom for three years and that the sales representative who rode with him knew little about the car’s functions.

Reliability is an issue too: Tesla continues to struggle with below average ratings and the US commercial watchdog Consumer Reports says the current generation of second-hand EVs are ”consumed with problems”.

The tipping point

But these issues are likely to pass as manufacturing processes improve, by which time Tesla’s Model 3 is expected to go on sale in the US for around US$30,000.

If Musk pulls this off, it could be the tipping point for EVs in terms of consumer acceptance.